Property

Landlords

Income Tax relief for interest against rental income is being restricted to the basic rate of tax, with the restriction phased in over four years. This began in 2017/18; in the third year of the new rules, 2019/20, only 25% of interest paid will be allowed as a deductible expense. The remainder will be eligible for a reduction in tax liability at 20%. The rules are complicated and can produce unexpected results.

Annual Tax on Enveloped Dwellings

The annual tax charges on residential properties worth more than £500,000 that are owned through companies and other envelope arrangements will go up for 2019/20 in line with inflation. The charge on a dwelling worth between £500,000 and £1 million will be £3,650 (up from £3,600); the maximum charge on a dwelling worth over £20 million will be £232,350 (up from £226,950).